Calculate the depreciation and the book value of equipment

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Reference no: EM131900199

Problem

The initial cost of equipment is $1,000,000. Assuming a life of five years and a resale value of $200,000,

a. Calculate the depreciation and the book value of this equipment for the next 7 years. Use both straight-line and double declining balance depreciation methods.

b. If the equipment is sold at year 4 for $400,000, what is the capital gain or loss using both of the above mentioned methods of depreciation?

Reference no: EM131900199

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